Centerac Technologies Ltd Management Discussions

Global Economy

Global growth is projected at 3.3 percent both in 2025 and 2026, broadly unchanged from the October 2024 World Economic Outlook (WEO) forecast with an upward revision in the United States offsetting downward revisions elsewhere. The near-term outlook is characterized by divergent paths, while medium-term risks to growth are tilted to the downside. Renewed inflationary pressures could interrupt the monetary policy pivot, with implications for fiscal sustainability and financial stability. The policy mix should balance trade-offs and rebuild buffers.

(Source: World Economic Outlook, International Monetary Fund (IMF), January 2025)

According to the latest projections from the PwC Network, global economic growth is expected to ease slightly to 2.6% in both 2025 and 2.5% in 2026, down from 2.8% in 2024. This moderation is largely due to ongoing geopolitical tensions and rising protectionist policies. The US economy is forecast to expand by just over 2%, while Chinas growth is set to slow to around 4.6%. The eurozone is projected to experience subdued growth, with GDP rising by 0.9% in 2025 and edging up to 1.4% in 2026 as Germany begins to recover. In contrast, India is expected to maintain strong momentum, with growth exceeding 6%. Against this backdrop, Maltas 6% growth in 2024 and its projected 4% growth over the next two years stand out as comparatively strong.

(Source: Central Bank of Malta, PwC Network)

Indian economy

Indias growth story continues to draw global attention, backed by strong fundamentals and consistent performance. Real GDP, which measures the economys output after removing the effects of inflation, expanded by 6.5 per cent in 2024-25. The Reserve Bank of India expects this pace to continue into 2025-26. Other projections echo this optimism, with the United Nations forecasting growth of 6.3 per cent this year and 6.4 per cent next year, while the Confederation of Indian Industry places its estimate slightly higher at 6.40 to 6.70 per cent.

Over the past decade, Indias economic size has expanded sharply. In 2014-15, the GDP at current prices was ^106.57 lakh crore. This figure is expected to rise to ^331.03 lakh crore in 2024-25, nearly tripling in ten years. In the past year alone, nominal GDP increased by 9.9 per cent, while real GDP rose by 6.5 per cent, underscoring the economys continued resilience and vigour.

(Source: https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154840&ModuleId=3)

Industry Overview

The global Information Technology (IT) industry continues to experience rapid growth, driven by the adoption of cloud computing, artificial intelligence, cybersecurity solutions, and digital transformation initiatives across sectors. The Indian IT sector, in particular, remains a global leader in IT services and software exports, supported by a strong talent pool, cost competitiveness, and government initiatives like "Digital India" and "Startup India."

Despite macroeconomic challenges, the demand for next-generation technologies such as data analytics, Internet of Things (IoT), and machine learning is increasing, providing significant growth opportunities.

Here is a pie chart illustrating the IT industry market size distribution, with segments like Cloud Services, Software Development, Cybersecurity, IT Consulting, and Others

Business Overview

We are one of the IT services globally. We combine the business knowledge and industry expertise of our domain specialists and the technical knowledge and implementation skills of our delivery team leveraging our products, platforms, partnerships and solutions in our development centers located around the world.

We develop and integrate innovative solutions that enable our clients to leverage IT to achieve their business objectives at competitive costs. We use our quality processes and global talent pool to deliver time to development advantages, cost savings and productivity improvements.

Our IT Services business provides a range of IT and IT-enabled services which include digital strategy advisory, customer centric design, technology consulting, IT consulting, custom application design, development, reengineering and maintenance, systems integration, package implementation, global infrastructure services, analytics services, business process services, research and development and hardware and software design to leading enterprises worldwide.

The vision for our business is "To earn our clients trust and maximize the value of their businesses by providing solutions that integrate our deep industry insights, our Annual Report 2023-24 leading technology and best- in-class execution". We seek to emphasize our core values of being passionate about our clients success, treating each person with respect, being global and responsible, and maintaining unyielding integrity in everything we do. The markets we serve are undergoing rapid changes due to the pace of developments in technology, innovation in business models and changes in the sourcing strategies of clients. Pressures on cost- competitiveness, an uncertain economic environment and immigration restrictions are causing clients to develop newer business models. On the technology front, digital business has changed the nature of demand for IT services. Development of advanced technologies such as cloud based offerings, big data analytics, mobile applications and the emergence of social media is making technology an integral part of the business model of our clients. In addition to the Chief Information Officer, newer stakeholders such as Chief Marketing Officer, Chief Digital Officer and Chief Risk Officer play a key role in shaping the technology roadmap of our clients. These trends on newer business models, emerging technologies and sourcing patterns provide us with significant growth opportunities.

INDUSTRY STRUCTURE & DEVELOPMENT

The Indian IT industry growth was normal during the year

However, in the course of the last decade, Indias IT software industry has scripted one of the most amazing success stories by contributing very substantially to Indias flourishing forex reserves and to employment, alongwith radically altering the countrys image and standing amongst nations.

FY25 witnessed the industry strengthening its position as the global technology and innovation hub. This is reflected in the fact that despite uncertainties due to elections in several countries, the industry is expected to witness resilient growth in FY25 with revenue (including hardware) estimated to reach $283 Bn (5.1% y-o- y growth), an addition of nearly $14 Bn over last year. Exports are expected to cross the $200 Bn mark growing

4.6% y-o-y to $224 Bn. Domestic technology sector is trailing towards the $60 Bn mark, growing at 7.0% y-o-y to reach $58.2 Bn.

(Source: NASSCOMM report)

OPPORTUNITIES AND THREATS

Opportunities:

• Rising global demand for digital transformation and IT consulting services.

• Growing adoption of cloud solutions, SaaS, and AI-driven automation.

• Expanding domestic market with increasing IT spending by SMEs and enterprises.

• Government support through policies, incentives, and infrastructure development.

Threats:

• Intense competition from global and local IT service providers.

• Rapid technological changes requiring continuous innovation and investment.

• Geopolitical uncertainties and currency fluctuations impacting exports.

• Rising cybersecurity risks and compliance requirements.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The company provides Information Technology Support Service.

During the year under review, the Company achieved significant milestones in expanding its service offerings and strengthening its client base across multiple geographies. The Company focused on delivering value-added IT solutions in areas such as cloud migration, software development, and managed services.

Key highlights of the performance:

• Revenue growth of 27.78% compared to the previous year.

• Expansion into new verticals including and e-commerce, publication, blogs etc.

• Successful launch of in-house developed software products and platforms.

• Strengthening of strategic partnerships with global technology providers.

OUTLOOK

The Company is optimistic about its growth prospects, driven by increasing global IT spending and opportunities in emerging technologies. The strategic focus will remain on innovation, talent development, and expanding service capabilities. The Company will continue investing in R&D and partnerships to deliver cutting-edge solutions to its clients.

Risk and Concerns

Key risks include market volatility, cybersecurity threats, talent retention challenges, and regulatory changes in key markets. The Company has implemented a comprehensive risk management framework to identify, monitor, and mitigate these risks effectively.

Internal Controls Systems and their adequacy

CENTERAC has proper and adequate system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorised use or disposition, and that transactions are authorised, recorded and reported correctly.

The internal control systems are supplemented by an extensive programme of internal audits, reviews by management, and documented policies, guidelines and procedures. The internal control systems are designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets.

Discussion on Financial Performance with respect to operational performance.

During the financial year under review the Company has generated revenue from operations of Rs. 87.97 Lakhs as compared to Rs. 68.84 Lakhs generated in the previous year. The Company has earned a profit of Rs. 3.87 Lakhs as compared to profit of Rs. 17.11 lakhs earned in the previous year. Your Directors are continuously looking for avenues for future growth of the company.

Material Development in Human Resources/Industrial Relations:

Company hires the best talent from anywhere in the country to attract the best people that it needs for its services. The Company has well designed training programme to take care of the training needs of the professionals to keep them abreast of the new technologys changes.

The Company enjoys healthy relations with its customers, investors, employees, banks, and various state and central government departments. To offer the most cost-effective solutions to the overseas existing clients and also to capture new clients, the Company also recruits highly skilled technical persons from reputed institutes.

Employees remain the Companys most valuable asset. The Company continues to invest in employee training, upskilling, and creating a conducive work environment. Employee engagement initiatives and leadership development programs have been strengthened to enhance productivity and retention.

KEY RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios.

Ratios	2024-2025	2023-2024	Change %	Explanation for Change being> 25%
Debtors Turnover	1.3	1.70	76.5	As per notes of financials
Inventory Turnover	NA	NA	NA
Interest Coverage Ratio	1.31	4.93	26.6
Current Ratio	4.9	11.62	42.2
Debt Equity Ratio	0.2	0.63	31.7
Operating Profit Margin (%)	0.04	0.24	16.7
Net Profit Margin (%)	0.04	0.24	16.7
Return on Net Worth (%)	0.63	0.32	196.9

Change in Return on Net Worth:

The net worth of the company is Rs. 6.18 Lacs

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections estimates, and exceptions may be "forward looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or event.